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He said the devastating incident, which is being treated as an arson investigation by police, was something from which the small town would never recover.

"This is the fifth commercial residence destroyed by fire in the past two years," Mr Flynn said.

"Towns like Millmerran don't survive things like this."

Since the building burnt down, a constant procession of cars has driven past, residents clearly shocked at the destruction despite the club's doors not having opened since it went into liquidation in July 2010.

DESTROYED: Police have commenced an arson investigation into the fire.Peter Collins Channel

EARLIER: Millmerran builder Barry McKinlay said he was absolutely devastated to see the town's beloved sports club go up in flames.

The once-popular Kent St sports club, which housed valuable and sentimental sports memorabilia, was engulfed in flames on Saturday at 8.50pm.

Police have launched an arson investigation following the major fire which destroyed the council building.

No one was in the premises when emergency crews arrived.

"It's sad to see it gone," Mr McKinlay, who was involved in the building of some parts of the building, said yesterday.

Police are investigation the fire that destroyed the Millmerran Sports Club at the weekend.Peter Collins, Channel 9

"It's a big loss to the town. It's so sad it's gone forever.

"It was a place we could all go together.

"After council took over the building we had it in our heads that maybe one day we could go back and do that again, but now that's never going to happen."

Anyone with information which could assist with the investigation should contact Crime Stoppers anonymously via 1800 333 000 or cimestoppers.com.au 24 hours a day.